Legit short term loans

Before you submit your application, it's always worth checking: is the short term loan you’re applying for legit?

Compare short-term lenders Check your eligibility now
How to find the right loan 5 tips for choosing a lender

Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk.

Please note: High-cost short-term credit is unsuitable for sustained borrowing over long periods and would be expensive as a means of longer-term borrowing.

Short term loans can help you make ends meet, but it’s important that you make sure you’re using a legitimate lender. Use the table below to compare loans from recognised, regulated payday lenders.

Table: promoted deals, sorted by total payable
How much do you need to borrow?

How long do you need to borrow for?

1 - 5 of 5
Name Product Available Amounts Monthly repayment Total payable Link
QuidMarket Short Term Loan
£300 to £1,500
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Representative example: Borrow £300 for 3 months at a rate of 292% p.a. (fixed). Representative APR 1297.5% and total payable £454.38 in 3 instalments of £151.46.
The Money Platform Short Term Loan
£250 to £1,000
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Fund Ourselves (Welendus) Short Term Loan
£100 to £1,500
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Representative example: Borrow £200 for 122 days at a rate of 208% p.a. (fixed). Representative 504.7% APR and total payable £286.62 in 4 monthly payments of £71.71.
Moneyboat Short Term Loan
£200 to £1,500
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Representative example: Borrow £400 for 4 months at a rate of 255.5% p.a. (fixed). Representative APR 939.5% and total payable: £597.48 in 4 payments of £149.37.
Lending Stream Instalment Loan
£50 to £1,500
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Representative example: Borrow £200 for 6 months at a rate of 292% p.a. (fixed). Representative 1,333% APR and total payable £386.61 in 6 monthly payments of £64.44.
Please note: You should always refer to your loan agreement for exact repayment amounts as they may vary from our results.

What is a legit short term loan?

Times can be tough, but that doesn’t mean you should settle for just any short term loan you can find. A legit payday loan is one that is offered to you legally. The lender needs to abide by the regulations set by the Financial Conduct Authority (FCA). Short term loans can be applied for online and in store but fall under the same regulations.

Generally, short term lenders have more relaxed eligibility criteria than banks and other lenders. You’ll be able to apply for a short term loan if you have bad credit, are on a lower income or receive government benefits. However, the relaxed eligibility criteria do mean rates and fees are higher than other loans.

Lenders still have to stick to the rules set by the FCA – including a cap on the daily interest and one off fees they can charge you.

What is the “ability-to-repay” rule??

Lenders must make a reasonable judgment on an applicant’s ability to repay the loan. The lender should assess factors such as income, housing expenses and existing debt in determining if the applicant can reasonably repay the loan.

If a lender doesn’t ask you for any of that information or doesn’t attempt to evaluate if you can afford the loan, the lender probably isn’t legit. Since there are plenty of lenders that check, you should move on and find one that combines good terms with a strong lending ethic.

Loans jargon explained

  • APR. The annual percentage rate (APR) is designed to be a benchmark for consumers, providing an annual summary of the cost of a loan. As well as the interest, the APR also takes into account any compulsory charges – like an “admin” or “set up” fee (if there is one). However, crucially, lenders only have to award the advertised APR to 51% of those who take out the loan – the other 49% could be offered a different (higher) rate at the lender’s discretion. That’s why it’s often referred to as the representative APR.
  • Fixed rate. A fixed interest rate is one that does not change over the life of the loan. Short term loans are almost always offered with a fixed rate, but the size of your repayments can still vary based on the lender’s repayment structure.

How to choose a legit short term loan

You should keep the following in mind when looking to find legitimate lenders:

  1. FCA authorisation. If the lender you’re borrowing from is legitimate, it should be in the FCA register.
  2. Contact details. Take some time to find a lender’s contact details. If a lender provides no more than a contact form or an email address, see how responsive it is before you apply. A legitimate short term lender shouldn’t shy away from providing a physical address, phone support or live chat.
  3. Fees and charges. Direct lenders of legit short term loans are legally required to be upfront about the fees and charges you have to pay during the loan term, and they adhere to all given maximum limits. The loan contract should clearly set out all applicable fees and charges.
  4. Use money for any reason. Legit short term lenders don’t place any stipulations on how you can use loan funds as long as you’re using the money for a legal reason. If your lender tries to dictate how you can use your loan funds, it might not be legit.
  5. Doesn’t require money upfront. One of the biggest red flags when researching a lender is if it requests money upfront. Origination fees are paid out of your loan amount, and you shouldn’t have to pay anything before you borrow.

Image of woman with laptop and caption The average age of a short-term borrower in the UK is 31

How much do short term loans cost?

Whether you’ve decided on a payday loan or an instalment loan, you may face a bigger expense than you initially expected. Short term loans are designed to be repaid quickly. If you’re unable to pay on the due date, you’ll be charged more fees and extra interest, which can quickly increase the total cost of your loan.

As with every lending option, always be sure you can repay what you borrow.

Short term loan cost comparison

Loan amount: £200
  • Loan term: 4 months
  • Interest rate: 292% (fixed)
  • Monthly repayment: £83
  • Total cost: £332
Loan amount: £200
  • Loan term: 6 months
  • Interest rate: 292% (fixed)
  • Monthly repayment: £64
  • Total cost: £386

Things to keep in mind

Take some time to go through the loan’s terms and conditions, as this document tells you how much you may have to pay in different circumstances such as rollovers and late payments.

You’ll also have to pay additional fees if you make a late payment, and your lender will report your missed payments to credit bureaus. Reconsider applying if you think you may have trouble repaying your borrowed funds.

Example: Don has a costly vet bill

Don knows how costly payday loans can be, but after receiving a large bill from the vet, he realises he has no other choice but to take one out. Rather than applying with the first one he finds, Don chooses to compare different lenders.

He checks the FCA regulations and finds that some are offering much more than they're legally allowed. Others claim that they don't conduct credit checks or have guaranteed acceptance.

Don passes over these and instead picks a lender that clearly outlines its fees and has a good customer service line. He borrows £200 and works the extra cost into his budget for the next month.

* This is a fictional, but realistic, example.

Bottom line

Knowing what to look for in a legit lender is just as important as understanding common scams. Once you’ve checked government regulations, know how much you need to borrow and have an idea how to repay, start comparing your options to be sure you’re getting a good deal.

Frequently asked questions

We compare payday/short-term loans from

Drafty Line of Credit
QuidMarket Short Term Loan
The Money Platform Short Term Loan
Fund Ourselves (Welendus) Short Term Loan
Moneyboat Short Term Loan
Lending Stream Instalment Loan
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.

More guides on Finder

  • Loans like Credio

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  • Compare 3-month short-term loans

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  • Compare £300 short-term loans

    It’s not always possible to see what costs are around the corner. If you’ve found yourself £300 short then you might be considering a payday/short-term loan. Use our guide to learn more about payday loans, to compare lenders and to calculate the cost of a £300 loan.

  • Compare £100 short-term loans

    Need £100 to cover an unexpected shortfall? Before taking out a payday/short-term loan it’s smart to compare rates from a range of lenders. Use our fast and simple repayment calculation and learn more about short-term loans.

  • Can you repay your short term loan early?

    Why not repay your payday loan early if you can? Find lenders that let you close your loan early without charging you a penalty or fee.

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